Progress against bribery
When the United States passed a law 20 years ago barring U.S. firms from paying bribes overseas, many decried it as the work of hopelessly naive goody-goodies. The Foreign Corrupt Practices Act, it was said, would accomplish nothing but to help French, Japanese and German firms steal contracts away from Americans. Corruption was and always will be an integral part of doing business.
Well, it has taken a while but it seems as though the rest of the world is finally catching up with the United States on this one. The 29 industrialized nations of the OECD, along with five additional countries, recently completed a treaty that will require all signatories to ban overseas bribery -- in essence to adopt their own versions of the Foreign Corrupt Practices Act.
More broadly, the new antibribery treaty represents an acknowledgement that corruption is a growing problem and one that hurts almost everyone involved. Honest and competent companies, of course, are injured when they lose contracts that they should have won. But even bribing companies end up inefficiently spending too much time dealing with public officials and ensuring that the terms of a corrupt transaction are upheld -- that the bribery delivers, in other words.
The new treaty will not end corruption, it is safe to say. In a few respects, it does not bind other nations to go as far as does U.S. law -- in particular, it does not criminalize payments to officials of political parties, which in one-party states can be the equivalent of bribing government officials. It also remains for other developed nations to make good on their word and actually adopt new laws.
But when you consider that France and Germany to this day allow their firms to deduct overseas bribes from their taxes as legitimate business expenses, you begin to see what a significant step forward this represents. And if developed countries begin holding their companies to a minimally ethical standard, the World Bank will have more credibility in its campaign to diminish corruption among developing nations, too.
-- The Washington Post